Again, customs adjusts FX rate for collection of duties to N1,413/$ — up from N1,356/$

The Nigerian Customs Service (NCS) has adjusted its foreign exchange (FX) rate for tariffs and duties collection to N1,413.62 per dollar.

The adjustment comes a day after customs moved the rate to N1,356 on Friday, February 2, 2024 — from N951.

The new rate, which represents an increase of 4.18 percent or N56.74, was updated on the government’s single window trade portal on Saturday.

Among other tariffs, the NCS collects customs duties in Nigeria, levied on imports.

Rates vary for different items, typically from 5 percent to 35 percent, and are assessed with reference to the prevailing harmonised commodity and coding system (HS code).

Stakeholders have bemoaned recent rate adjustments by the customs, citing the unsavoury consequences that could follow.

Jonathan Nicole, president of the Shippers Association of Lagos (SAL), said the new exchange rate for cargo clearance would increase inflation.

“There have been a lot of sad stories as regards doing business in our domain – the maritime sector,” he said.

“The new exchange rate will increase inflation and businesses will be grossly affected, terminating projections before imports. The rate will affect the manufacturing sector and goods and services will increase. The cost of transportation will skyrocket.”

Nigeria’s FX market (which also impacts rates on the customs’ trade portal) has witnessed serious degrees of volatility in the past week, with the naira crashing to its lowest.

The local currency had depreciated to N1,461 to the greenback on Thursday, before recovering to N1,435 at the official market, as at Friday.

At the parallel section of the market, however, the naira weakened to N1,410 per dollar on Friday, depreciating by N10 or 0.71 percent from the N1,400/$ traded the previous.

The customs had said it does not engage in arbitrary increases or decreases in exchange rates, noting that exchange rates for cargo clearing are based on the recommendation of the Central Bank of Nigeria (CBN).

Maintaining this position, Abdullahi Maidawa, the agency’s spokesperson, said: “The exchange rate is a product of monetary policy, you may wish to contact the relevant body responsible for that.”

“We are responsible for implementation of fiscal policy. We don’t determine exchange rate, we only use what is provided to us.”

Meanwhile, checks by TheCable show that CBN’s average rate of N1,413.62 as at Friday, aligns with the duty rate displayed on the customs’ trade portal at the time of filing this report.